To protect current shareholders from dilution of yield that comes from new deposits, Vanguard also closed its "Vanguard Federal Money Market Fund" on June 2. The decision to close the fund was made "to protect the interests of current fund shareholders by limiting the fund's need to purchase new short-term federal agency securities that offer negligible yields."

The merger of Vanguard Treasury Money Market Fund, which has an expense ratio of 0.28%, into Admiral Treasury Money Market Fund, with its lower expense ratio of 0.15%, will reduce expenses for Treasury fund shareholders. After the merger, the fund is expected to maintain its expense ratio of 0.15%. Additionally, reducing new cash flow into the Vanguard Federal Money Market Fund may slow the decline of that fund's yield.

For similar reasons, Vanguard Admiral Treasury Money Market Fund and Vanguard Treasury Money Market Fund were closed to new accounts on January 26, 2009.

Vanguard Admiral Treasury Money Market Fund (VUSXX)

Closed to new investorsCategory = Taxable Money MarketExpense ratio as of 12/29/2008 = 0.15%SEC yield as of 06/03/2009 = 0.18%

Vanguard Treasury Money Market Fund (VMPXX)

Closed to new investorsCategory = Taxable Money MarketExpense ratio as of 12/29/2008 = 0.28%SEC yield as of 06/03/2009 = 0.05%

Vanguard Federal Money Market Fund (VMFXX)

Closed to new investorsCategory = Taxable Money MarketExpense ratio as of 12/29/2008 = 0.28%SEC yield as of 06/03/2009 = 0.34%

If you have less than a few million dollars to invest, I would look to invest in 6 month to 2 year CDs to get much better yield with FDIC and NCUA protection spread between several banks and credit unions.

For example, the 1-year US Treasury note is only paying 0.46% but you can get a 1-year CD at Ally Bank (formerly GMAC Bank) that pays 2.80%.